Now he thinks governments will close down bitcoin and other cryptocurrencies if they get too big.

Speaking in an interview with CNBC-TV18 in New Delhi, India on Friday, the JPMorgan CEO explained that law enforcement will begin to crack down on peer-to-peer digital currencies by controlling it and threaten buyers and sellers with imprisonment. This would, he notes, create a black market.

“Right now these crypto things are kind of a novelty. People think they’re kind of neat. But the bigger they get, the more governments are going to close them down,” he said.

“It’s creating something out of nothing that to me is worth nothing. It will end badly.”

Whether the state does clamp down on bitcoin or not, he became quite the statist by slamming the cryptocurrency for not having government backing.

“With central banks, (the money) says legal tender: you have to take this as payment. It’s very cheap to do, it’s very easy to move back and forth. JPMorgan moves $6 trillion around the world every day very efficiently, very quietly, very effectively and very cost efficient,” he said.

“Creating money out of thin air without government backing is very different from money with government backing.”

Dimon’s comments have a great effect on the bitcoin market. Soon after he described bitcoin as a fraud earlier this month, the price plunged from about $4,340 to just under $3,000 in one day. But not everyone is pleased with his analysis, causing some to file a lawsuit against Dimon and JPMorgan for spreading false information.

Will the government rein in bitcoin and other digital currencies? It’s unlikely, considering that more governments and central banks seem to be favoring cryptocurrencies because it is a great monitoring and tracking tool.

At the time of this writing, bitcoin is trading at around $3,500.

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